United States Fidelity & Guaranty Co. v. American State Bank

Tenth Circuit

United States Fidelity & Guaranty Co. v. American State Bank

372 F.2d 449, 10 Fed. R. Serv. 2d 218

CourtCourt of Appeals for the Tenth Circuit

DecidedFebruary 10, 1967

DocketNo. 8515

StatusPublished

Cited by9 cases

This text of 372 F.2d 449 (United States Fidelity & Guaranty Co. v. American State Bank) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

United States Fidelity & Guaranty Co. v. American State Bank, 372 F.2d 449, 10 Fed. R. Serv. 2d 218 (10th Cir. 1967).

Pincite

Opinion

DAVID T. LEWIS, Circuit Judge.

This case reaches us as a Rule 54(b) offshoot, Fed.R.Civ.P., in an original ac[450]*450tion brought under the Miller Act, 40 U.S.C. §§ 270a and 270b, by the United States for the use and benefit of Flint Steel Corporation, a subcontractor, against the PLS Company, a joint venture engaged as prime contractor on a federal project at Ft. Sill, Oklahoma. The United States Fidelity & Guaranty Company was joined as party defendant as surety on the Miller Act bonds required of PLS for both payment and performance. After obtaining leave of court, the appellant surety filed a third-party complaint alleging a right to recover from appellees actual and punitive damages together with attorney’s fees suffered and expended by the surety under the requirements of its performance bond. Appellees were non-residents of Oklahoma and the claim against them was premised upon allegations of ex maleficio deeds leading to a right to indemnity implied in law. The specific allegation asserted that appellees had conspired to present a totally false statement of PLS’s financial worth that had induced appellant to issue its surety bonds. This appeal followed an order of the trial court vacating its previous order allowing the filing of the third-party complaint, quashing the service of summons upon appellees, dismissing them from the action, and dismissing the action.

Although the full scope of this appeal has required the parties to present arguments touching upon the jurisdictional and venue aspects of the Miller Act, the requirements of Rules 4(f) and 14, Fed. R.Civ.P., as they apply to the Miller Act, and the availability of the Oklahoma long-arm statute in such cases, we deem a threshold question to be dispositive. Did the court err in dismissing the third-party complaint when it became apparent that the appellant surety’s claim against appellees was founded on the performance bond and was totally unrelated to the payment bond on which the use plaintiff brought the original action ? We hold that the court did not err and affirm the judgment.

In Limerick v. T. F. Scholes, Inc., 292 F.2d 195, this court held it proper under the Miller Act to allow a third-party complaint by the surety wherein it was alleged that the third-party defendants had agreed to indemnify the prime contractor for any failure of the sub-contractor to perform and that the claim in the,.main .action was predicated on the non-performance of the sub-contractor. In Limerick the amount claimed by the use plaintiff was the identical amount for which the indemnifying third parties would be liable and the fact of liability of the third parties was dependent upon the success of the use plaintiff in the main action. In the case at bar, in contrast, no attempt is made to pass on to third parties all or part of the claim asserted against the original defendants. The original suit is on a payment bond. The third-party complaint is for indemnification for losses on a performance bond.¹ Under the Miller Act these bonds represent separate obligations running to separate obligees; to persons supplying materials and labor in the case of the payment bond and to the government of the United States in the case of the performance bond. Here, regardless of the success or failure of the use plaintiff’s cause, the appellant surety’s claims against appellees would persist as an entirely independent claim. The fact that the third-party claim arises against the same general background as the main claim is not enough to allow application of Rule 14 to independent claims. Horn v. Daniel, 10 Cir., 315 F.2d 471; 3 Moore, Federal Practice ¶ 14.07.

Affirmed.

Free access — add to your briefcase to read the full text and ask questions with AI

DAVID T. LEWIS, Circuit Judge.

This case reaches us as a Rule 54(b) offshoot, Fed.R.Civ.P., in an original ac[450]*450tion brought under the Miller Act, 40 U.S.C. §§ 270a and 270b, by the United States for the use and benefit of Flint Steel Corporation, a subcontractor, against the PLS Company, a joint venture engaged as prime contractor on a federal project at Ft. Sill, Oklahoma. The United States Fidelity & Guaranty Company was joined as party defendant as surety on the Miller Act bonds required of PLS for both payment and performance. After obtaining leave of court, the appellant surety filed a third-party complaint alleging a right to recover from appellees actual and punitive damages together with attorney’s fees suffered and expended by the surety under the requirements of its performance bond. Appellees were non-residents of Oklahoma and the claim against them was premised upon allegations of ex maleficio deeds leading to a right to indemnity implied in law. The specific allegation asserted that appellees had conspired to present a totally false statement of PLS’s financial worth that had induced appellant to issue its surety bonds. This appeal followed an order of the trial court vacating its previous order allowing the filing of the third-party complaint, quashing the service of summons upon appellees, dismissing them from the action, and dismissing the action.

Although the full scope of this appeal has required the parties to present arguments touching upon the jurisdictional and venue aspects of the Miller Act, the requirements of Rules 4(f) and 14, Fed. R.Civ.P., as they apply to the Miller Act, and the availability of the Oklahoma long-arm statute in such cases, we deem a threshold question to be dispositive. Did the court err in dismissing the third-party complaint when it became apparent that the appellant surety’s claim against appellees was founded on the performance bond and was totally unrelated to the payment bond on which the use plaintiff brought the original action ? We hold that the court did not err and affirm the judgment.

In Limerick v. T. F. Scholes, Inc., 292 F.2d 195, this court held it proper under the Miller Act to allow a third-party complaint by the surety wherein it was alleged that the third-party defendants had agreed to indemnify the prime contractor for any failure of the sub-contractor to perform and that the claim in the,.main .action was predicated on the non-performance of the sub-contractor. In Limerick the amount claimed by the use plaintiff was the identical amount for which the indemnifying third parties would be liable and the fact of liability of the third parties was dependent upon the success of the use plaintiff in the main action. In the case at bar, in contrast, no attempt is made to pass on to third parties all or part of the claim asserted against the original defendants. The original suit is on a payment bond. The third-party complaint is for indemnification for losses on a performance bond.¹ Under the Miller Act these bonds represent separate obligations running to separate obligees; to persons supplying materials and labor in the case of the payment bond and to the government of the United States in the case of the performance bond. Here, regardless of the success or failure of the use plaintiff’s cause, the appellant surety’s claims against appellees would persist as an entirely independent claim. The fact that the third-party claim arises against the same general background as the main claim is not enough to allow application of Rule 14 to independent claims. Horn v. Daniel, 10 Cir., 315 F.2d 471; 3 Moore, Federal Practice ¶ 14.07.

Affirmed.

Cite This Page — Counsel Stack

Bluebook (online)

372 F.2d 449, 10 Fed. R. Serv. 2d 218, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fidelity-guaranty-co-v-american-state-bank-ca10-1967.

Opinion

Related

Cite This Page — Counsel Stack